M1 Finance IRA Review 2024: Features, Fees, and More

Best If You Want

M1 offers a compelling hybrid of a powerful automated investing platform (with features like dynamic allocation rebalancing) with the level of control of a traditional self-directed IRA and key banking activities. With M1, you can curate and adjust your investments using interactive pie charts called “Pies.” Get started quickly by choosing from a large collection of pre-made M1 pies called Model Portfolios built around various investing strategies and themes (like responsible investing, for example), create a custom Pie from scratch, or use a combination of both. This is what makes M1 unique: You can customize your portfolio to the extent that you want—and then set your strategy in motion with automation.

Regardless of how you create your portfolio, M1 will help maintain your desired allocation over time with dynamic rebalancing. This works in two ways; first, when new funds are added to your account, M1 will invest them to maintain your desired allocation. In addition, you can manually rebalance your existing investments with the click of a single button and M1 does the rest. This allows you to “set it and forget it” if you’d like, allowing automatic investing to do its job, or to take a more active role in asset allocation. In the end, M1 is a flexible platform that is suitable for more hands-on investors as well as those who’d rather take a step back, and also offers many users a free investing platform.

M1 also offers several other products, including brokerage accounts for non-retirement assets, margin loans, a high-yield cash management account, a credit card with cash-back rewards, and the ability to open a crypto account.

M1 Fees

M1 is a commission-free online brokerage platform*—there are no platform or AUM fees. In May of 2024, M1 will implement a $3 platform use fee for users who do not have at least $10,000 invested (though you can also get this fee waived by having an active M1 Personal Loan). For users who want some additional features, M1 offers a paid subscription called M1 Plus that costs $3 per month in account fees. Members receive additional benefits when investing, such as an additional trade window in the afternoon. The Plus membership offers additional features and better rates for other products across the platform, including its high-yield savings account, loans, and credit card.

* Commission-free trading of stocks and ETFs refers to $0 commissions charged by M1 Finance LLC for self-directed brokerage accounts. Other fees may apply such as regulatory, M1 Plus membership, account closures, and ADR fees. For a complete list of fees, visit the M1 Fee Schedule.

What You Can Invest In

Like other investing platforms, M1 allows you to choose what kind of investments you want in your portfolio. M1 allows you to select from individual stocks, ETFs, and cryptocurrencies. If you aren’t sure where to start with investing, M1 offers helpful pre-made portfolios that you can use, or you can use them as a jumping-off point and customize them to your liking. These pre-set portfolios include Model Portfolios for various investment strategies as well as targeted retirement Pies. M1 also offers some educational resources on its website if you’re looking to learn more about investing.

Limitations

An M1 investment account does come with its limitations, including the lack of availability of certain asset classes (like mutual funds, bonds, fractional shares and options trading) as well as the platform’s lack of tax loss harvesting.

M1 offers an exceptional degree of portfolio customization to its clients, but it’s important to understand that, with only one trading window per day for most users, M1 is not a day-trading platform. However, since most retirement savers aren’t actively trading (or “day trading”) in their accounts, this isn’t a problem; but if you happen to be dead set on making multiple trades a day in your IRA, M1 may not be the best choice for you.

Account Minimums

M1 carries a $500 account minimum for retirement accounts (such as an individual retirement account or IRA), while its other types of individual investment portfolios carry a $100 minimum balance requirement.

Customer Support

M1 offers a variety of ways to reach out to its customer service team, including a well-stocked Help portal with pre-written answers to many common questions as well as an automated chat feature. They also have live representatives available by phone (312-600-2883) and email (help@m1.com). Representatives work from 9 a.m. to 4 p.m. Eastern Monday through Friday, excepting market holidays.

Account Types

M1 offers a few different types of retirement accounts to be aware of.

Traditional IRA

Traditional IRAs are funded with pre-tax money, which means you’ll get a deduction on what you’ve contributed in the year you’ve done so, but will be liable for income tax later down the line in retirement. Traditional IRAs can be an important part of financial planning, especially for those who plan to be in a lower income tax bracket at retirement time.

Roth IRA

A Roth IRA, on the other hand, is funded with after-tax dollars, which means you can look forward to tax-free withdrawals once you reach retirement age so long as all the other rules are followed. Roth IRAs do come with income-based eligibility restrictions, however; if you have questions, a financial advisor can help.

SEP IRA

SEP IRAs are designed to help small business owners or independent contractors maximize their retirement by making contributions as both employer and employee.

401(k) Rollovers

M1 also offers a rollover IRA that makes it easy for you to see and manage all of your retirement funds in one place. Not sure how to get started? Capitalize can help!

Other Features

M1 offers products beyond IRAs. This includes a high-interest rate cash management account, lending products (aka M1 Borrow), and a credit card that offers cash-back rewards on everyday spending. In addition, M1 offers standard brokerage accounts and margin loans at competitive rates for investors looking to add leverage to their investment strategy. M1 is always adding new features to its product and was one of the first investment portfolio management platforms of its type to offer cryptocurrency trading.

Considering an M1 Finance IRA?

For users who want the flexibility and customization of a self-directed IRA and the convenience of automated rebalancing, M1 is a compelling choice. M1 delivers a strong user experience that can suit the needs of both beginner and advanced investors. Whether you want to build a portfolio from scratch or model your allocations based on M1’s pre-made portfolios; you’ll be able to get to the retirement portfolio that suits your goals.

If you’re looking to fund your new M1 Finance IRA with a 401(k) rollover, Capitalize can help. We’ve made it our mission to make this process easier for everyone. We can handle the entire process for you. Most of the process can be done online and our rollover experts will guide you through any of the manual parts. Get started with your 401(k) to IRA rollover in just a few minutes.